Ford Mustang Mach-E vehicles at a Ford dealership in Colma, California, on July 22, 2022.
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After a home, buying a car is the most expensive purchase most consumers will ever make during their lifetime. The transition to electric vehicles by major auto makers is likely to make the process a little more stressful, at least in the early days of the EV era when many consumers are still under-informed on EV basics. If consumers are to be sold on the mass adoption of battery-powered electric vehicles, car dealers are going to be essential to the pitch. It’s the network of franchise auto dealers who provide education, service, and face-to-face sales, so companies like GM and Ford are working closely with them. But it’s a daunting moment for both sides of the car business.
“We haven’t had a shift of this magnitude in the auto industry ever,” said Robb Hernandez, president of Monterey Park, Calif.-based Camino Real Chevrolet. “The ground is still moving beneath dealers making decisions. The automakers are doing their best making this shift, but the regulation is more of the driving force of how we will all have to pivot.”
That includes his home state of California, where 100% of new car sales are mandated to be EVs by 2035.
“I can only speak for GM,” Hernandez said. “They are listening as we make these changes but the landscape is ever-changing at this point,” he said. But he added, “Most auto dealers are optimistic and excited for the changing landscape.”
As of late last year, 65% of Ford’s dealers had opted into the EV certification program (a little under 2,000, according to data shared by Ford), as it has started to make the role of car dealers central to the EV transition process.
Many consumers want a streamlined process and virtually every transaction today has some online component, according to Brian Maas, president of the California New Car Dealers Association. But with the complicated nature of a vehicle purchase transaction (trade-ins, financing, purchase of extended warranties and other products), a fully online experience will only work for a percentage of car buyers. “The rest will still want to ‘kick the tires’ and take a test drive before investing $50,000+ in the average new car,” he said.
This preference is expected to hold true for EVs. A recent report from the California Air Resources Board (CARB) cites “customer choice,” “vehicle availability,” and “affordability” as keys to mass adoption, all of which require a critical role to be played by dealers.
“I think CARB understands that dealers are essential to the adoption of EVs,” Maas said.
He pointed to several factors. First, and most obvious, outside of Tesla it is franchised dealers who have to explain and sell this new technology to the mass market. Second, all the incentives adopted federally and in states such as California are administered by or through dealers. And finally, EVs won’t approach affordability in the short term without dealers making these funds available to consumers and explaining how these programs work at the point of purchase.
Kerrigan Advisors, which works with dealership groups on sales and acquisitions, noted that Ford, relative to some top global competitors, has a relatively large dealership network to manage through the EV transition. “To some, Ford’s approach is a way to weed out the smaller dealers who are unwilling to make the EV investment,” said Erin Kerrigan, founder and managing director. “Keep in mind Ford has over 3,000 franchises in the U.S.,” Kerrigan said. “By contrast, Toyota has only 1,482 and sells more vehicles than Ford.”
But she expects more Ford dealers will opt in at a future date, once they observe a meaningful consumer shift to EVs.
Timing of the EV transition is a concern
While EV sales are increasing rapidly — as recently as 2021, total battery-powered electric vehicle sales in the U.S. were under 450,000, but Kelley Blue Book says sales surpassed 800,000 in 2022 and are expected to top one million this year — dealers remain cautious about the timelines outlined by the auto companies.
“Despite significant increases in EV sales in 2023, dealers are largely skeptical about the OEM’s timeframes on the EV rollout,” Kerrigan said. “Many say they expect the rollout to take twice as long as expected and EV market share to be half as much as projected by the OEMs.”
Ford’s opt-in window will open again in 2027 for dealers that did not initially join.
Using California as a model — with its timeline being the most aggressive – the process can begin to feel pretty squeezed, Maas said.
“I like to point out that this is the most significant change in personal transportation since we went from horses to automobiles early in the 20th century. In addition to changing how vehicles are powered (from ICE to BEV), we have to provide the infrastructure for charging these vehicles and the electrical grid to support such charging, and we have to convey to consumers that their driving behavior will have to change,” he said. The CARB 2035 goal is ambitious, and California is much further along than any other state with a similar goal or considering adopting one, but “it’s still a significant leap,” Maas said.
Dealers also read the headlines and have concerns about OEMs being able to produce EVs at the pace required by mandates, with raw materials like lithium and cobalt in high demand and uncertain supply. As big a supply-demand issue is whether consumer interest will be sufficient to meet the mandate set by the state government in California for a full transition in 12 years. It is a national and state transition that ultimately becomes a local decision.
Even within California, a dealer in a rural area of the state where EV charging infrastructure is a challenge and where public investment in charging will be less likely is going to be more wary than a dealer in a major metro area in the state. A dealer in Santa Monica may decide more quickly, “I need to be all-in on EVs,” Maas said. “Where you stand depends on where your business sits,” he said. “Significant EV adoption in large cities in California seems pretty clear now, but the question is will we have significant EV adoption throughout the entire state, will Eureka have it at the same pace as LA? Maybe, maybe not?” Maas added.
Who pays for EV charging
The charging element of EVs, more than any other factor, influences how an individual’s day unfolds in a state like California where two million new cars are sold annually. Factors include car owners who live in multi-family housing; and the time it can take to charge — as much as 30 minutes to several hours vs. less than five minutes today to fill a gas tank at the many fueling stations with prices prominently posted and adjusted frequently.
“These challenges aren’t insurmountable, but we do have to explain them to consumers, honestly, so that future car buyers are prepared for what lies ahead,” Maas said.
To become “EV certified,” Ford dealerships can buy into a $500,000 tier or a $1.2 million tier, with the vast majority of that investment tied to the expense of installing EV charging infrastructure. At the lower end, this certification provides dealers with repair and maintenance capabilities and a public DC fast charger, but no EVs to show in the showroom, and no access to a Ford.com presence. It also caps their total EV sales at 25% of inventory. The “elite” tier provides two public DC fast chargers, demo units, rapid replenishment, and a presence on Ford.com.
Ford CEO Jim Farley told Automotive News last December when it announced that two-thirds of dealers had signed on for the EV program (most for the higher-priced tier), “The future of the franchise system hangs in the balance here,” Farley said. “The No. 1 EV player in the U.S. bet against the dealers. We wanted to make the opposite choice.”
But specific concerns from dealers, expressed to Ford, offer a window into the desire on the part of the dealers to also ask for deepening commitment from Ford as part of their own commitment to the e-certification program. One issue has been dealer reluctance to offer public charging at their locations and asking Ford to up its own investment in public charging, even though dealers are aware the OEMs are spending billions on factories for new EVs and batteries.
Dealers are prepared to offer charging for new vehicles to be sold on their lot and vehicles being serviced. But OEMs asking dealerships to serve as public charging stations has led to pushback. “Tesla pays for its supercharging network, yes with lots of taxpayer subsidies, but they pay,” Maas said. “Dealers are in the business of selling and servicing cars, not selling electrons,” he said. While future business cases may prove that dealers can make money from charging, Maas noted that the selling of electrons is heavily regulated by public utility commissions across the country. “Maybe dealers just want to sell and service cars,” he said. “I haven’t been to a dealership that sells gasoline.”
Charging is a big issue, but not the only issue for dealers.
“While 24/7 public charging has perhaps garnered the most attention, there are numerous program features that we have asked Ford to modify or eliminate,” Maas said.
Dozens of state dealer trade associations have challenged Ford on multiple aspects of its EV certification program, including its basic legality relative to state law about franchise models.
Auto makers reliant on the franchise model have a financial incentive to control more of the margin that will be available in the EV market, and have learned from watching the margin profile and quality control enjoyed by Tesla’s direct-to-consumer model.
“We have to change our cost profile,” Ford CEO Jim Farley told CNBC in February.
There is always tension between franchisors and franchisees, and all states have franchise laws to try and balance the relationship, and where individual dealers and dealer associations are pushing back is where they feel OEMs are using the EV transition as a way to make asks they never would have made previously. That is not limited to charging, but OEM programs dictating how consumers can reserve EVs, and prescribing how EVs have to be sold, dealer trade-in programs, and service contracts.
“Dealers generally chafe at manufacturer requirements that intrude on their ability to sell to their customers,” Maas said. “OEMs make cars and the dealer buys them at wholesale and the dealer sells. Why should that change because it’s powered by electricity? There’s nothing magic about the fact that it is powered by electricity,” he said.
Auto dealership sales market remains hot
Kerrigan said most of the dealers with whom she speaks do expect GM to eventually have a similar program to Ford’s. Meanwhile, GM is reducing its dealer headcount by buying out existing dealers. In the case of Buick, GM is offering a franchise buyback for those dealers who do not want to make the EV investment. Cadillac has also “quietly reduced” its dealer count through buyouts, Kerrigan said. As opposed to Ford’s “pay-to-play” strategy, she described GM’s current approach as more carrot than stick and, in reducing franchise count, ensuring the GM network is well-positioned to sell and service EVs.
Dealers, though, may see two sides to the ways both big OEMs are playing the EV transition. Ford, by giving dealers the option to opt in later, will be seen by some dealers who are more reluctant today as being more flexible, if requiring more of an upfront investment today. Some dealers may see the GM approach as the more rigid one, based on their situation. “If you sold your store, there is no changing your mind,” Maas said. The OEMs are in a difficult position attempting to meet all dealer needs and concerns about EVs. “It’s hard to have a national program that is one size fits all for the new vehicle market,” he said.
In the short-term, the EV concerns are not proving to be a big factor in overall willingness among entrepreneurs to invest in car dealerships. Amid a big jump in new and used car prices — the average new car retail price increased from $33,000 to over $46,000 between 2015 and 2023 — transactions in the auto dealer market were the second-highest ever in 2022, according to Kerrigan, with a record 845 franchises sold during the first three quarters of the year. While publicly traded auto retailers retreated from the market as their stock market valuations were cut, private buyers increased their presence as earnings soared for the third-consecutive year. Average dealership earnings rose 9% in 2022, which was 210% above the pre-pandemic five-year average.
“Even in a rising interest rate environment, dealers voted with their pocketbooks and grew their businesses through acquisition in 2022 and continue to do so in 2023,” Kerrigan noted in its April report on sales activity.
Car dealership owners have proven to be an adaptive group of small business owners throughout history.
“Dealers are very resilient business people,” Kerrigan said. “The demise of the auto retail business model has been erroneously predicted countless times.”
She said most are not overly concerned about the shift to EVs. While some worry about a decline in fixed operations revenue from sales and service as ICE cars disappear, others see the potential for higher revenue in the service and parts department as dealers retain a higher percentage of the customer service spend with EVs. Maas said while there has been a lot of talk about a service business cliff related to EVs, it’s just talk. “Service is not going away,” he said. In 2022, service contributed 12% of dealership revenue, according to the National Auto Dealers Association, versus nearly 50% for new car sales and 38% for used vehicles.
Dealers are gaining a larger share of EV sales, totaling almost 260,000 units in 2022, according to NADA, and dealers capturing 35% of the new EV market by the end of the year. “We expect this to continue as more BEV models are released by the legacy OEMs in the coming years,” NADA said in its annual report.
“The smartest dealers are trying to figure out where this is going and make decisions both for their family and investment in the business,” Maas said. “Ultimately, it will be up to consumers to tell the dealers and OEMs and the larger market what’s going to happen, because if consumers buy these vehicles in huge numbers it’s a signal to the market we need to respond. But if they don’t buy at the pace CARB has set, then some adjustments have to be made.”
More than 3 years later, the vehicle never went into volume production. Instead, Tesla only ran a very low volume pilot production at a factory in Nevada and only delivered a few dozen trucks to customers as part of test programs.
But Tesla promised that things would finally happen for the Tesla Semi this year.
The goal was to start production in 2025, start customer deliveries, and ramp up to 50,000 trucks yearly.
Now, Ryder, a large transportation company and early customer-partner in Tesla’s semi truck program, is talking about further delays. The company also refers to a significant price increase.
California’s Mobile Source Air Pollution Reduction Review Committee (MSRC) awarded Ryder funding for a project to deploy Tesla Semi trucks and Megachargers at two of its facilities in the state.
Ryder had previously asked for extensions amid the delays in the Tesla Semi program.
In a new letter sent to MSRC last week and obtained by Electrek, Ryder asked the agency for another 28-month delay. The letter references delays in “Tesla product design, vehicle production” and it mentions “dramatic changes to the Tesla product economics”:
This extension is needed due to delays in Tesla product design, vehicle production and dramatic changes to the Tesla product economics. These delays have caused us to reevaluate the current Ryder fleet in the area.
The logistics company now says it plans to “deploy 18 Tesla Semi vehicles by June 2026.”
The reference to “dramatic changes to the Tesla product economics” points to a significant price increase for the Tesla Semi, which further communication with MSRC confirms.
In the agenda of a meeting to discuss the extension and changes to the project yesterday, MSRC confirms that the project went from 42 to 18 Tesla Semi trucks while the project commitment is not changing:
Ryder has indicated that their electric tractor manufacturer partner, Tesla, has experienced continued delays in product design and production. There have also been dramatic changes to the product economics. Ryder requests to reduce the number of vehicles from 42 to 18, stating that this would maintain their $7.5 million private match commitment.
In addition to the electric trucks, the project originally involved installing two integrated power centers and four Tesla Megachargers, split between two locations. Ryder is also looking to now install 3 Megachargers per location for a total of 6 instead of 4.
The project changes also mention that “Ryder states that Tesla now requires 600kW chargers rather than the 750kW units originally engineered.”
Tesla Semi Price
When originally unveiling the Tesla Semi in 2017, the automaker mentioned prices of $150,000 for a 300-mile range truck and $180,000 for the 500-mile version. Tesla also took orders for a “Founder’s Series Semi” at $200,000.
However, Tesla didn’t update the prices when launching the “production version” of the truck in late 2023. Price increases have been speculated, but the company has never confirmed them.
New diesel-powered Class 8 semi trucks in the US today often range between $150,000 and $220,000.
The combination of a reasonable purchase price and low operation costs, thanks to cheaper electric rates than diesel, made the Tesla Semi a potentially revolutionary product to reduce the overall costs of operation in trucking while reducing emissions.
However, Ryder now points to a “dramatic” price increase for the Tesla Semi.
What is the cost of a Tesla Semi electric truck now?
Electrek’s Take
As I have often stated, Tesla Semi is the vehicle program I am most excited about at Tesla right now.
If Tesla can produce class 8 trucks capable of moving cargo of similar weight as diesel trucks over 500 miles on a single charge in high volume at a reasonable price point, they have a revolutionary product on their hands.
But the reasonable price part is now being questioned.
After reading the communications between Ryder and MSRC, while not clear, it looks like the program could be interpreted as MSRC covering the costs of installing the charging stations while Ryder committed $7.5 million to buying the trucks.
The math makes sense for the original funding request since $7.5 million divided by 42 trucks results in around $180,000 per truck — what Tesla first quoted for the 500-mile Tesla Semi truck.
Now, with just 18 trucks, it would point to a price of $415,000 per Tesla Semi truck. It’s possible that some of Ryder’s commitment could also go to an increase in Megacharger prices – either per charger or due to the two additional chargers. MSRC said that they don’t give more money when prices go up after an extension.
I wouldn’t be surprised if the 500-mile Tesla Semi ends up costing $350,000 to $400,000.
If that’s the case, Tesla Semi is impressive, but it won’t be the revolutionary product that will change the trucking industry.
It will need to be closer to $250,000-$300,000 to have a significant impact, which is not impossible with higher-volume production but would be difficult.
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British oil and gasoline company BP (British Petroleum) signage is being pictured in Warsaw, Poland, on July 29, 2024.
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British oil major BP on Friday said its chair Helge Lund will soon step down, kickstarting a succession process shortly after the company launched a fundamental strategic reset.
“Having fundamentally reset our strategy, bp’s focus now is on delivering the strategy at pace, improving performance and growing shareholder value,” Lund said in a statement.
“Now is the right time to start the process to find my successor and enable an orderly and seamless handover,” he added.
Lund is expected to step down in 2026. BP said the succession process will be led by Amanda Blanc in her capacity as senior independent director.
Shares of BP traded 2.2% lower on Friday morning. The London-listed firm has lagged its industry rivals in recent years.
BP announced in February that it plans to ramp up annual oil and gas investment to $10 billion through 2027 and slash spending on renewables as part of its new strategic direction.
Analysts have broadly welcomed BP’s renewed focus on hydrocarbons, although the beleaguered energy giant remains under significant pressure from activist investors.
U.S. hedge fund Elliott Management has built a stake of around 5% to become one of BP’s largest shareholders, according to Reuters.
Activist investor Follow This, meanwhile, recently pushed for investors to vote against Lund’s reappointment as chair at BP’s April 17 shareholder meeting in protest over the firm’s recent strategy U-turn.
Lund had previously backed BP’s 2020 strategy, when Bernard Looney was CEO, to boost investment in renewables and cut production of oil and gas by 40% by 2030.
BP CEO Murray Auchincloss, who took the helm on a permanent basis in January last year, is under significant pressure to reassure investors that the company is on the right track to improve its financial performance.
‘A more clearly defined break’
“Elliott continues to press BP for a sharper, more clearly defined break with the strategy to pivot more quickly toward renewables, that was outlined by Bernard Looney when he was CEO,” Russ Mould, AJ Bell’s investment director, told CNBC via email on Friday.
“Mr Lund was chair then and so he is firmly associated with that plan, which current boss Murray Auchincloss is refining,” he added.
Mould said activist campaigns tend to have “fairly classic thrusts,” such as a change in management or governance, higher shareholder distributions, an overhaul of corporate structure and operational improvements.
“In BP’s case, we now have a shift in capital allocation and a change in management, so it will be interesting to see if this appeases Elliott, though it would be no surprise if it feels more can and should be done,” Mould said.
On today’s hyped up hydrogen episode of Quick Charge, we look at some of the fuel’s recent failures and billion dollar bungles as the fuel cell crowd continues to lose the credibility race against a rapidly evolving battery electric market.
We’re taking a look at some of the recent hydrogen failures of 2025 – including nine-figure product cancellations in the US and Korea, a series of simultaneous bus failures in Poland, and European executives, experts, and economists calling for EU governments to ditch hydrogen and focus on the deployment of a more widespread electric trucking infrastructure.
New episodes of Quick Charge are recorded, usually, Monday through Thursday (and sometimes Sunday). We’ll be posting bonus audio content from time to time as well, so be sure to follow and subscribe so you don’t miss a minute of Electrek’s high-voltage daily news.
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